Hankyu Holdings Inc. launched its planned public tender offer Tuesday for shares of Hanshin Electric Railway Co., leaving industry watchers to speculate about how Hanshin’s biggest shareholder, the Murakami fund, will respond.
As announced Monday, the holding company of Hankyu Corp., a Kansai area railway, is offering 930 yen per share for Hanshin stock, through June 19, in an attempt to take over rival Hanshin.
Hankyu aims to acquire more than 45 percent of Hanshin’s outstanding shares through the tender offer. But sources said the Murakami fund, which holds about 47 percent of Hanshin shares, believes the offer is too low.
Hankyu wants to buy the fund’s entire stake in Hanshin, saying that unless it can obtain a stake of more than 45 percent, it will withdraw the tender offer.
Hankyu officials said they will still try to persuade the fund to take the offer.
The Murakami fund purchased its Hanshin stock at an average price of about 700 yen per share. If it accepts the offer by Hankyu, it would make a profit of more than 45 billion yen for the entire stake.
Hanshin stock on the Tokyo Stock Exchange ended Tuesday at 943 yen, down 5 yen from Monday. Hankyu stock moved 2 yen higher at 602 yen.
On Monday, Hanshin shares closed at 948 yen on the Tokyo Stock Exchange, up 9 yen from last Friday’s close.
The boards of Hankyu and Hanshin approved a plan Monday that would make Hanshin a wholly owned subsidiary of Hankyu through a stock swap Oct. 1, pending approval from their respective shareholders in June.
SMBC to fund bid
Sumitomo Mitsui Banking Corp. will fund the entire cost of Hankyu Holdings Inc.’s public tender offer for shares of Hanshin Electric Railway Co., SMBC officials said Tuesday.
Sumitomo Mitsui will provide Hankyu with as much money as it needs for the bid, the bank officials said.
The holding company of Hankyu Corp., a Kansai railway, is offering offering 930 yen per share of rival railway Hanshin. The three-week public tender runs through June 19.
Hankyu is looking to buy at least 45 percent of Hanshin’s shares, which at its current offer price would cost at least 176.4 billion yen.
Hankyu said it will pull the bid unless it can obtain at least a 45 percent stake, or 189.7 million shares.
Hankyu has pledged to buy all shares Hanshin shareholders are willing to sell, which could push the maximum cost of the acquisition as high as 392.1 billion yen. There are about 421.65 million Hanshin shares outstanding at present.
If the tender offer is successful, the bank will invite other financial institutions to join the underwriting scheme by converting its loan into a syndicated package, the SMBC officials said.
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